Posted 3 years ago on Oct. 15, 2011, 7:19 p.m. EST by ARod1993
(2420)
This content is user submitted and not an official statement

We've never said "no capitalism" as a movement. We've never said "no banks" either. We accept that the movement of capital as facilitated by financial institutions is what propels this economy forward. However, if you look more closely at this statement, it essentially means that the financial services industry has an incredible amount of power. If it chokes up and shuts down, so do we. If financial institutions decide to go on a bender, their high carries us for a while, but then their hangover equals severe recession to depression for us.
The only other institution or series thereof with that kind of power is the government, and the government is a) at least in theory directly accountable to the people who have to live with the consequences of its mistakes and b) subject to constant calls for its diminution, castration, and in some cases its elimination since 2008. What I'm trying to understand is why an industry so powerful was (and still is) subject to so little regulation and oversight. And quite honestly, I can't think of a satisfactory answer.

Gotcha; what I meant (and I'm assuming you meant as well) is why shouldn't they be subject to regulation? Our government is split in three, with the branches designed to war with each other rather than claim power from the ordinary citizen, and is held rather strictly to a series of rules and regulations known as the Constitution, often enforced by various subgroups of the American people. Why should they receive special status? And more importantly, how can we strip away that status and replace it with accountability?

Here's what I think. The power of the financial industry in both the economy and politics has grown enormously in the past 40 years or so, in direct relation to the repeal of certain regulations. Banks are still regulated, of course, but not nearly as much or as well, IMHO. Why? Because they developed ways for lots of investors to make lots of money, but it could only be done to greater and greater extent by taking off the regulatory brakes. They convinced politicians this meant economic progress.

(It certainly is the case that enormous sums of money were made, by some people. It's also true that the economy expanded, though the average worker didn't earn more. Globalization advanced, and imports increased greatly over exports as production migrated toward cheaper labor overseas. Credit loosened, people took on more and more debt so as not to lose ground, financial innovation became financial fraud. And then the train ran off the tracks. But they're too well-connected and systemically important now for the law to touch.)

I think we need to restructure the financial industry so that it loses the political and economic power that it has built up. This is a very catch-22 kind of situation, of course, but as long as people still have the vote and can be organized to use it in their own interests, it should be possible.